A competition in which numbered tickets are sold for a prize awarded by chance. The word lottery is derived from the Middle Dutch noun lot, from the action of drawing lots for decision-making and divination, and from Middle French loterie. The modern sense of a competition in which prizes are allocated by chance has been attested since the 15th century.

The first state-sponsored lotteries were introduced in the Northeast in 1967, largely to raise money for public projects without raising taxes on the middle class and working class. States that had no previous lottery experience quickly embraced the new idea, assuming that the large amounts of revenue would allow them to expand the social safety net and other government services while avoiding onerous tax increases.

In most state lotteries the number of winners is determined by a random drawing. The winning numbers or symbols may be printed on tickets, counterfoils, or other tokens that are collected in a sealed pool and mixed by mechanical means (such as shaking or tossing) before being extracted. Computer systems are increasingly used for this purpose.

Lottery games are available at a wide range of retail outlets, including convenience stores, gas stations, grocery stores, restaurants and bars, churches and fraternal organizations, bowling alleys, and newsstands. The National Association of State Lotteries (NASPL) reports that in 2003, there were 186,000 retailers selling lottery products. In general, a disproportionate share of the revenue from these sales is returned to retail outlets as commissions. The NASPL Web site provides links to the websites of all participating retailers. The site also reports on the distribution of lottery profits among state and territorial beneficiaries.